Conversations and care at the heart of financial counselling
This Anti-Poverty Week 2021, Salvation Army Moneycare counsellor Noel Duffin explains that financial counsellors have a range of tools that may help alleviate financial stress. An essential starting point he says, is to destigmatise money issues, and create an environment where community members feel free of judgement and confident to open up about their challenges.
Money problems can strike at any age and for a wide variety of reasons. Yet many fear being judged if they talk about their struggles, and all too often wait until they are in crisis to seek help.
At the age of 19, Dean* was excited to secure an apprenticeship with a local electrician. It had been his dream for many years.
With his limited pay, he would save to buy tools, one-by-one. However, he also needed transport to get himself to a variety of building sites. He had no car and no family support to help him.
One day Dean walked into a car dealership and walked out – despite his limited income – convinced to sign up for a loan for a $24,000 ute (with an annual interest rate of 21 per cent). Over the next year, Dean managed to keep up his repayments, but during the second year of his apprenticeship, work became scarce and his employer could no longer offer him full-time work.
Financial counsellor Noel Duffin explains that by the time Dean approached The Salvation Army’s Moneycare, debt collectors were knocking at Dean’s door, looking to repossess the car, and he was under great emotional stress.
“Dean was still working part-time, but once we spent time talking with him and completed his financials, it was clear that he couldn’t afford his repayments, plus insurance,” Noel says. “We worked together and considered all options as we negotiated with the lender to sell the ute. Dean understood that he would have a financial shortfall once the ute was sold.
“We spoke with the lender about what steps they had taken [initially] to ensure Dean could afford the vehicle. After talking to them, they agreed to waive the outstanding amount. This gave Dean the opportunity for a fresh start and after about six months, he was able to buy a small run-around vehicle.”
Noel is one of around 85 Salvation Army (free) financial counsellors, plus 12 financial capability workers, who work at around 80 different sites across Australia. (Over the 2019/20 financial year, 13,757 individuals were supported by Moneycare, with over 52,000 sessions held throughout the year).
“Money is one of the key stressors in households, but in many families, it’s just not talked about,” Noel explains. “People often just let their money issues fester.
“What they don’t realise is they can call the Moneycare line [1800 722 363], or the National Debt Helpline [1800 007 007], and so often, their situation is not as complex as it appears. We can usually give them tools to lighten the load quite quickly.”
He says talking to trusted friends, family members or a financial counsellor can make an immediate difference.
“On your own, some things that are simple can seem insurmountable, but opening up and talking can be profoundly life-changing.”
While Noel encourages everyone to seek advice before making any major purchase and encourages those struggling with money issues to seek help early. The reality is, however, most people contact him at crisis point.
He says: “It could be a bad relationship, sickness in the family, or loss of a job. It could happen to any of us,” and stresses the importance of destigmatising financial problems, to encourage people to seek help sooner and without a sense of shame.
“For me what is most important is the opportunity to be able to chat with people and normalise their situation; to look for a way forward and work with them at a pace that’s acceptable to them. It’s about providing people with light at the end of the tunnel, listening to them, engaging with them and then using the tools we have to work out their situation,” Noel says.
Noel regularly supports older people, who have lost a partner, after many decades together, and who had never directly controlled the family finances.
“I think of Annie*, whose partner of 35 years, John*, had died of a stroke,” Noel says. John had managed all the finances and Annie had looked after the household.
“Annie didn’t have any confidence in dealing with financial institutions and lacked confidence in managing her own finances. She had been going without basic items to make minimum payments on two credit cards that were both in John’s name. The only asset she owned was her car.”
Noel contacted the banks, and although Annie was prepared to accept responsibility for the credit cards, the balances were waived. Noel then worked with Annie to formulate a budget and track expenses, as well as set up deductions, such as rent and electricity.
He says: “Annie [really] always had the skill to effectively manage her finances, but lacked the confidence. There are many ‘Annies’ in our community.
“There is sadness, but also great joy in this role. We can often help lighten the financial load quite quickly. It is so satisfying to help lift the burden. When someone opens up about their issues and we begin to look at solutions, you often instantly see the positive impact.”
*These are true stories with names and some details changed for privacy.